chapter  2
12 Pages


Until recently, the topic of deflation had received little attention in the financial press. This is not surprising; we haven't encountered it since the 1930s.

While deflation is typically thought of in purely economic terms, it also has a psychological aspect to it. Webster s defines deflation as "a decrease in the amount of currency in a country." No doubt, the monetary aspects of deflation are important. However to view deflation in a strictly monetary sense is insufficient.